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Oxfam Hong Kong publishes new survey on Hang Seng Index constituents' performance in ESG disclosure

Author: Oxfam Hong Kong, Published on: 21 July 2019

[Excerpt translation from Chinese-language provided by Business and Human Rights Resource Centre]

“Survey on the Hang Seng Index (HSI) Constituents’ transparency on Corporate Social Responsibility (2017-2018) – Executive summary and policy recommendations”, 11 July 2019

The Hong Kong Stock Exchange has launched the “Environmental, Social and Governance Reporting Guide” (“ESG Guide”) for two years… Oxfam Hong Kong has commissioned CSR Asia to conduct this survey to assess Hang Seng Index (HSI) Constituents’ performance in the social disclosure aspect, which currently falls under the scope of voluntary disclosure, after the ESG Guide has been introduced (the year 2017/ 2018) and let the public understand from the survey results the importance for the Hong Kong Stock Exchange to upgrade its reporting principles and content.

Key findings:

-          The overall levels of transparency of as many as 90% of HSI constituents are unsatisfactory

-          Over 80% of HSI constituents did not report on the aspect of “supplier social assessment and actions taken”

-          The economic aspect: no HSI constituents voluntarily disclosed information on the ratio of entry-level employees receiving minimum wage

-          “Labour and decent work”: close to 90% of HSI constituents did not disclose whether employees have participated in the process of development of policies or measures related to occupational safety and health

-          Social aspect: almost 90% of HSI constituents did not disclose the potential negative impacts of its operations on the local community

-          Human Rights aspect: fewer than 10% of HSI constituents report on the “Human Rights Assessment” indicators

-          Close to 60% of companies did not seek third-party independent assurance, over 30% of companies did not use the GRI disclosure standards

This survey revealed that the overall levels of transparency of over 90% of HSI constituents are unsatisfactory and disappointing, with an average score of 26. It shows that they lack the awareness of making their social policies transparent, making it hard for the public to monitor companies’ performance on corporate social responsibility. All companies should face squarely their low marks across all assessment indicators and strive for ways to improve.

… Oxfam Hong Kong, based on the survey results, makes the following recommendations to the Hong Kong Stock Exchange, corporates and investors:

-          Upgrade the disclosure obligations of all aspects to Mandatory Disclosure Requirements

-          Fully adopt international reporting standards to regulate companies’ transparency

-          Ensure that suppliers protect labour rights and human rights along their supply chain

-          Require corporates to acquire independent assurance

-          Companies’ top management should pledge on addressing corporate social responsibility; reporting should align with international standards

-          Institutional investors should incorporate companies’ performance in corporate social responsibility into investment decision making

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